First, let me say that I am extremely happy with Amarin's (AMRN) Vascepa numbers this week, despite the slight decrease in the overall number. This may seem counterintuitive to those readers who think that only an increase in numbers can be a good thing, and that any week-to-week drop in numbers is no good and a sign of impending doom. However, that type of thinking is misleading, and I will tell you why.
Before moving into the numbers, let's have a quick review of the company and the drug we are discussing, Amarin and Vascepa. According to its website, "Amarin Corporation plc is a biopharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular health. Amarin's product development program leverages its extensive experience in lipid science and the potential therapeutic benefits of polyunsaturated fatty acids. Vascepa (icosapent ethyl) is Amarin's first FDA approved product and is available in the United States by prescription."
Now, let us move onto what this article is really about, and that is reviewing and interpreting the numbers for this week. There were reportedly 4493 total scripts (currently no Bloomberg information on the breakdown between new and refills available, but other sources show 2031 refills, about a 4% increase), and this number of total prescriptions for the week ending 7/19 is down slightly from the previous week ending 7/12. This has led some investors to take a negative outlook on the numbers, and has led some naysayers to proclaim the sky is falling.
However, those numbers need to be looked at in terms of the overall market for the MARINE indication for hypertriglyceridemia that Vascepa targets, which is the very high triglyceride market. When the other drugs in the class are looked at week-to-week, we see that the two major competitors, Lovaza and Niaspan had a week-to-week drop of 6.29% and 5.2%, respectively, whereas Vascepa's week-to-week only showed a .3% drop. More importantly, Vascepa captured 2.64% of the total very high triglyceride market, which is its highest overall percentage to date (weekly prescription data provided by Symphony and IMS Health).
Why do those percentages matter? They are significant because they show that even in a down week for script writing in the 'very high trig' market, Vascepa did not suffer the same kind of adverse drop because it gained scripts that previously had gone to either Lovaza or Niaspan. The market share of 2.64% reinforces the fact that Vascepa is slowly winning the market, and for investors this means that the company is proceeding with its goal to be the first-in-class choice therapy for very high triglycerides.
There is a downside though, and that is the fact that despite these positive indicators, the month-to-month growth percentage increases in Vascepa prescriptions has slowed. Although I believe this is likely a matter of vacations and such in the medical and patient community, this could be a sign that the company is going to burn through its cash before it reaches the profitability tipping point. However, that said, the recent dilution and subsequent cash infusion should provide a cushion for this slower growth, and so long as the company sees a nice increase in percentage in September, it should be on pace to beat earnings predictions for Q3.
Further, a 4% growth in refill rates is a good thing, as that shows positive patient adoption beyond the initial prescription. This number is just as important as the new prescription rates, as a one-and-done patient is not going to help the company reach profitability.
When it comes to the numbers, weekly prescriptions are indeed important for revenue and as a growth indicator, but the most important number in my mind when viewing the competitive landscape is the percentage of market share captured. Vascepa reaching a new high this week in market share despite its somewhat small sales force of approximately 275 representatives in the field, as well as its failure to drop much in numbers despite the mainstream media's various distortions and reports on potential hazards of "fish oil," lead me to view this week's numbers as a positive sign.
Previously, Seeking Alpha contributor Quote the Raven has stated in an article that he would be concerned if: "Prescription data slows dramatically week-over-week (or total prescriptions continue to regress in any facet) -- I'm going to be keeping an extremely close eye on week over week numbers. It's the lifeblood of the entire company and extremely important that data continues to trend upward." However, I do not feel like Vascepa's failure to increase in numbers and continue the uptrend are important this week because the competitor numbers dropped at a much higher percentage, and the drug's market share increased (as I mentioned above).
As I indicated in my last article, I believe Amarin is moving in the right direction, and I fully expect them to beat the Q2 expectations for earnings, and continue moving in the right direction in terms of sales. Although the stock price isn't indicating the company's success, I believe it is only a matter of time until it does - likely after August conference call and October advisory panel leading into the December PDUFA on the sNDA. The conference call will likely provide some guidance for the remainder of the year and clear up some questions about the cash burn, and the expected positive ANCHOR indication advisory panel and subsequent approval in December open a market that is ten times that available to the company currently. That will lead to profitability.
For those who witnessed the stock touch $5.12, I recommend that you see it not as a panic moment, but as a buying opportunity. I believe anything under $5.60 is a bargain, and that these prices will be a memory after Amarin beats expectations when reporting Q2 earnings, as explained in my previous article.
Of course, there are potential concerns here, and my bullish stance might change if the company reveals some poor numbers in the August conference call, and my stance would definitely change if the ANCHOR indication received a negative vote at the advisory panel or failed to get approved in December. However, when weighing the risk-reward scenario, it seems clear to me that it heavily favors buying Amarin now.